Wednesday, September 17, 2008

Lehman Layman

The I-Bank behemoths have been crushed, the S&P has broken the 1175 mark (Bear-Sterns low of earlier this year), the Russian stock market has been halted, the retail investors have their hides nailed to the wall and on the back of these crushing news heres what the compensation/retirement/severence packages for the executives of these greedy, unregulated jackasses look like:

(1) The demi-god of I-banking Richard Fuld,CEO Lehman: Awarded $71.9 million by his board for bringing down Lehman. InterestinglyI learnt via Tradermark that in Lehman's board (supposedly in place to rein in rogue jackass CEOs like Fuld, who is best known for launching scathing public attacks on his executives in meetings) 9 are retirees, 4 are over 75, 1 is a navy admiral, 1 is a theatre producer, only 2 on the board ever had any direct contact with the finance industry. The board has a risk assessment commitee that has met atleast twice in both 06 and 07 (via SEC filings) and to them everything was fine.

(2) Merryl Lynch mariachies:

Current CEO John Thain took up Merryl's reins in Dec 1 of 07, after being offered a 15 million USD signing bonus. Since Mr.Thain's first day in office Merryl's shares have fallen a mere 60% . If he decides to leave after the merger he is guaranteed another 11 million USD.

Trading Chief at Merryl Thomas Montag who is at Merryl for less than 6 weeks (joined Aug 6th, 2008) is expecting 76 million USD in accelerated compensation of he decides to leave.

Strategy head Peter Kraus who is at Merryl for less than a week now (yes you heard it right) will get 95 million USD for his hard work over the past week.

In the meantime 8%+ of my portfolio has been shaved off in the past 2 weeks. God bless Corporate America.

So, these are new exectuives? The old ones must have seen what was about to happen and handed the job over to Fuld & other like him to be scapegoats. Hell, if someone appointed me to be the official guy to blame for a corporate collapse, I'd ask for millions, too. Still the numbers are anger-inducing.

I was actually offered a very senior position in a (sinking) REIT a couple of months ago. I rejected without giving it much thought. Maybe it was not the most profitable decision, but at least I am able to sleep at night.

@applicant: fuld is actually with lehman since the 70s, so no scapegoat loophole for him, infact he specifically rejected buy-out deals prior to the bankruptcy filing as he felt he wasnt getting a good price for lehman

About Me

OMG stands for Oh My God. Its origin can be traced back to the time when, after watching the whole of American Idols season 2, I realized that Clay Aiken was actually not a girl but a boy. The very first historical documented use of OMG is "OMG-Clay-Aiken".
This blog would be a chronicle for a(n) MBA admit (class of '12), but would avoid the usual cliches (read gmat prep, essay prep, interview prep etc etc). Although it would hopefully be, more informative and more entertaining than your usual mba-next-door-blog.
Current profession: Research scientist in the oil and gas space.
Desired profession: Professional Poker player.
More realistic desired profession: Energy and commodities consulting/Sales and trading.